It appears that Notification No. 109/2009 dated 23/02/09 proposes to clarify the confusion on Service Tax on movie theatres. The following appears to be the clarified position on the Service Tax liability of the movie theatres;
A] Theater owner screens the movie for fixed number of days and gets a fixed amount contracted. The revenue of tickets goes to distributor; in such cases ST is not applicable.
B] Distributor takes theater on rent and theater owner gets rent; in such cases ST is applicable under ‘Renting of immovable property’.
The industry may now work towards reducing the incidence of cost to enable exhibitors to reduce the cost of tickets to lure the already dwindling number of multiplex visitors.
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